Interview with Osino Resources Corp.
Interview Osino Resources: "The market has not yet realized how fast we are advancing Twin Hills."
time to read: 8 minutes | The interview was conducted by Nico Popp on May 3rd, 2021 in Vancouver (CAN).
President and CEO | Osino Resources Corp.
Suite 810 – 789 West Pender Street, V6C 1H2 Vancouver (CAN)
Table of contents:
Namibia as the Switzerland of Africa
news|financial: "Osino Resources operates in Namibia. At the same time, you have gained experience across the African continent. How do you assess Namibia as a mining location and how does the country differ from other mining nations on the continent?"
"[...] The processes in Namibia are predictable and the country itself is very safe. [...]" Heye Daun, President and CEO, Osino Resources Corp.
The conditions for resource companies in Africa are very different. It makes no sense to lump Africa altogether. Namibia itself is a mining nation and is characterized by great stability. On the one hand, this includes the reliable legal system and the social framework in the country. The processes in Namibia are predictable and the country itself is very safe. After more than one hundred years of active mining, our industry enjoys broad support among the population and the administration. To make the situation in the country tangible for continental Europeans, I call Namibia the Switzerland of Africa. If there are any prejudices about the continent, they certainly do not apply to Namibia.
What distinguishes the Namibian Gold Belt
news|financial: "Your prospective Twin Hills project is located on a 6,700 km plot of land in the middle of Namibia's gold belt. What distinguishes this region from a geological point of view and which renowned companies are already positioned there?"
Namibia is crisscrossed by a rock belt that, roughly speaking, stretches across the entire continent. In the past, Namibia was known for uranium and also copper. With gold, the situation is a little different. The rich rock layers in Namibia are covered by sand and other sediments. Therefore, these layers have hardly been accessible in the past. In the meantime, however, there are advanced exploration methods that enable us to penetrate these layers. If, at the same time, we have experience with the specific geology, there are great opportunities. The fact that the Namibian gold belt has great potential is demonstrated not least by the success of the Otjikoto mine. The Otjikoto mine is now being operated very successfully by B2Gold. Our team played a key role in its development before we sold the project to B2Gold.
Specifics of the exploration work
news|financial: "You mentioned the specifics of gold exploration in Namibia. To be successful, does it depend more on modern procedures or specific know-how about the situation on-site?"
"[...] Know-how and experience are indispensable if you want to reach your goal cost-effectively and quickly. [...]" Heye Daun, President and CEO, Osino Resources Corp.
It is the combination of both! Our exploration approach is similar to that of a dragnet investigation. We have information on several levels and have to bring them together successfully. It involves drilling but also geophysical soil samples and other impressions on site. This information has to be combined and interpreted. Geology, unlike engineering, is less about causal relationships. Interrelationships that apply in one region cannot be transferred one-to-one to other regions. Here, the experience we have already gained in Namibia comes into play. Thanks to this experience, we can combine various pieces of information and draw conclusions that result in successful wells. At this point, modern procedures and technology are very important. But you also have to be able to use the technology in a specific way. Know-how and experience are indispensable if you want to reach your goal cost-effectively and quickly.
Strong financing partners
news|financial: "You mention costs. How is Osino positioned on the financing side?"
"[...] Having funders who understand the exploration process and have patience is a huge advantage. [...]" Heye Daun, President and CEO, Osino Resources Corp.
We are fortunate to have an anchor shareholder in Ross Beaty who trusts our exploration approach. That trust has allowed us to advance exploration at a very high level between 2016 and 2019 until we finally hit the first very significant deposits in 2019. Having funders who understand the exploration process and have patience is a huge advantage. Too often, investors put pressure on exploration companies and make sure they cannot do their best work. That is not the case with us. Thanks to our partners, we can always act in a goal-oriented and thorough manner.
Working with Ross Beaty
news|financial: "How did the engagement of Ross Beaty come about?"
I sold a company to Ross Beaty in Ecuador a few years ago. Since then, there has been contact and mutual appreciation. Coupled with these prerequisites and the geology of our properties in Namibia, an investment was an obvious choice. In the course of this investment, other investors became involved in Osino, which has brought us to the comfortable situation we are in today: All parties involved know about the potential and are aware that good results require thorough work. Now that we have done many years of groundwork, the Company is entering a decisive phase.
Drilling program objectives
news|financial: "In just a few years, Twin Hills has become a developed project with a maiden resource estimate of 1.9 million ounces at grades of 1.1 g/t. This estimate is based on 69,000 meters of drilling to date. A further 75,000 meters are expected to follow in 2021 alone. What are the specific objectives of the drilling program? Do you want to define Twin Hills further or discover new zones?"
"[...] We are very confident about the drilling and see a lot of potential for positive surprises. [...]" Heye Daun, President and CEO, Osino Resources Corp.
We want to do everything we can to ensure that Twin Hills makes progress and becomes a mine! We consider the conditions for this to be very good. However, to achieve this goal, we have to secure the project. We can do this by gradually eliminating or minimizing existing risks. The recently published resource estimate shows 1.9 million ounces of gold. This result is already very respectable. By comparison, when we sold the Otjikoto project to B2Gold, we also had a resource estimate of 1.9 million ounces and a preliminary feasibility study. Today, Otjikoto represents about 20% of B2Gold's revenues, making it worth about USD 1 billion on its own. Twin Hills is at a similar stage in terms of resources. However, there are still some minor differences: the grades are still minimally lower and we have not yet secured the project by means of infill drilling, which is done to understand the geology between existing drill channels better. This year's planned drilling program will include defining Twin Hills, reducing geological risk, and preparing for the planned Pre-Feasibility Study and making new discoveries. We are very confident about the drilling and see a lot of potential for positive surprises.
Feasibility study for Twin Hills
news|financial: "You mention the preliminary feasibility study. When can we expect the study?"
We are already collecting data on this and expect to release initial feasibility data as early as mid-year. Our goal is to develop the bankable feasibility study directly from the preliminary feasibility study. For this, further expert studies are needed, some of which are already underway and will be incorporated into the study in the second half of the year. At the end of the year, we want to have the feasibility of the mine project clearly demonstrated for investors, apart from a low residual risk, in accordance with current mining standards. This demonstrates how far we have actually progressed. In some cases, the market has not yet recognized how quickly Twin Hills will develop in the coming months.
Comparison between B2Gold's Otjikoto Mine and Twin Hills.
news|financial: "You were instrumental in developing the Otjikoto mine, which is now owned by B2Gold and is very profitable. Where do you already see parallels between Twin Hills and Otjikoto? What are the differences?"
"[...] You could almost say Otjikoto and Twin Hills are twins. [...]" Heye Daun, President and CEO, Osino Resources Corp.
There are far more similarities than differences! The geology is very similar. You could almost say Otjikoto and Twin Hills are twins. Both projects are located in the same geological belt and have very similar geological structures. The size is almost identical and so is the infrastructure. Differences as of today are lower gold grades and a lower recovery rate at Twin Hills. However, we want to positively influence these factors with the planned drilling program. There is also a difference in the project status: Twin Hills is in a development phase. We are currently purchasing farms on our properties to obtain further rights apart from the mining rights we already hold. We are also applying for mining permits with the authorities. As outlined above, we are moving forward with other things to make Twin Hills a profitable mine as quickly as possible, as Otjikoto already is.
Opportunities in other projects
news|financial: "Your properties are spread across Namibia's gold belt. Can you imagine selling individual areas or handing them over to partners?"
That is conceivable in principle. However, we need to push some of our projects a little further so that they can stand on their own two feet in the future. Investors should know, however, that Osino has more to offer than Twin Hills. One example is Otjikoto East, which is directly adjacent to the Otjikoto mine; however, this project is still at an early stage. Our Goldkuppe project, which is closer to Twin Hills and can probably also offer higher grades, could also be interesting. But there, too, we are at a very early stage. For this reason, the market is currently focusing on Twin Hills, and rightly so. However, one cannot rule out that the other properties will gain in importance in the distant future.
Osino share with relative strength
news|financial: "Although around a third of your shareholders are private investors, your share price has remained stable even during the consolidation in the gold sector. What do you think is the reason for this?"
"[...] More and more investors recognize that we have a very high-quality project that can be developed very quickly. [...]" Heye Daun, President and CEO, Osino Resources Corp.
We are fortunate that our shareholders, both private and institutional, believe in the project and have a long-term focus. For this reason, we have been less affected by the sell-off in the gold sector. In addition, we have a low valuation. More and more investors recognize that we have a very high-quality project that can be developed very quickly. These characteristics are in demand on the market and favor the stable price trend.
news|financial: "Thank you very much for talking to us."